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Maverick Spend: The Risks of Going Rogue

April 22, 2014 by Hillary Ohlmann

Maverick Spend

Being a maverick isn’t always a bad thing. It worked for Tom Cruise in Top Gun. The whole San Francisco startup scene thrives on bad boys who know how to “hack the system.” In fact, the ability to think outside the box and innovate is a desired employee trait in most industries.

A maverick procurement manager could lead your company’s spending straight into the danger zone. However, it’s probably your procurement process that’s causing this risky behavior. We’re going to break down the causes and consequences of maverick spend and what you can do to avoid it.

What is maverick spend?

Maverick spend occurs when a procurement manager makes purchases from suppliers without following the company’s pre-established procurement policy. Maverick spend can happen for a variety of reasons. For example, a procurement manager may feel rushed and reach out for bids from friends or close business contacts to save time. Or the manager may feel that a purchase is too insignificant to merit the time and energy it takes to complete the procurement process. Regardless of why it happens, maverick spend can negatively affect your company’s bottom line.

A procurement manager who doesn't play by the rules is going to cost your company money in the long run. Purchasing done outside the pre-established process means your company won’t benefit from negotiated discounts with pre-approved suppliers. The bidding process might be hurried, resulting in higher bids from fewer suppliers. A maverick procurement manager may even unknowingly open the doorway for corruption by failing to get the minimum number of bids or negotiating a deal under the table.

How do I know I’m dealing with a maverick?

Maverick procurement managers usually don't go rogue with malicious intent. Most of them are just trying to make their own job go a bit more smoothly. By nature, humans tend to take the path of least resistance. They may find whatever process your company has established to be cumbersome and time consuming. It could be they haven’t quite mastered your company’s complex procurement software. Worse yet, if they’re using email to run RFPs, they are essentially doing whatever they want. It’s difficult to exercise oversight by email, making it easier to cut corners on procurement. After all, when the company saves money on costs, the average manager usually doesn’t see an increase in his or her monthly paycheck.

If you notice your procurement manager strutting around the office in a black leather jacket and aviator sunglasses and humming Kenny Loggins, you may have a maverick on your hands. But the good news is a simple change to your company’s procurement process is enough to make your procurement manager’s job easier and control maverick spend.

How do I maverick-proof our procurement process?

First of all, review the entire process. Perhaps your current software is too complex. In this case, you should consider simplifying to a more user-friendly solution. If, you’re still using paper or email, you must take the time to invest in an e-procurement solution. There are companies out there that offer both affordable and easy-to-use online procurement management software like DeltaBid.

You should also consider the transparency of your current process. You should be able to quickly compare bids, keep track of communication with approved suppliers, and see a general overview of every step of the process. Procurement processes lacking in transparency result in increased maverick spend. A simple online procurement solution can provide you with more oversight and better organization for the whole process.

Once you have solved these issues, you’ll be able to sit back and let the maverick do his job. If you’ve taken the time to make his job easier, he’ll be less likely to go rogue, and you’ll notice the difference in your bottom line.

 

Hillary Ohlmann

Written by Hillary Ohlmann

Hillary is DeltaBid's resident writer, copy editor, researcher, and all-around procurement enthusiast. She holds a degree in Journalism and Spanish from UW-Madison.

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